Companies House Fine - Court Action

Companies House Fine - Court Action

Didn't find your answer?

Hi,

I filed my companies house accounts on time and they wrote back to me later with a letter dated 01/03/2011 saying that my return could not be accepted because it couldn't be scanned (turns out some of the pages were a bit faint but still legible) but they said if I sent them a new copy before 28/02/2011 I could avoid a fine.  Obviously given the date they wrote to me it was impossible to avoid a fine which is £750.

I wrote back to them stating that I sent it on time, as far as I was aware at the time it was in a suitable format and I said they did not give me any chance to rectify the situation due to their letter dated after the deadline.  They wrote back to me saying they understood I had sent it on time etc but in the end said it doesn't matter about the date of the letter and the fact they gave me no chances to resend because it's the directors responsibility to send it in on time and of a acceptable format.

I was wondering if anyone else has had anything like this?  I will seek legal advice but this just seems very wrong that they can set people up like this, if I let them take me to court does anyone know what the process involves?  Surely I've got something to go on here....

Names of good solicitors who specialise in this area accepted!

Thanks

Dan

Replies (15)

Please login or register to join the discussion.

Locutus of Borg
By Locutus
04th Sep 2011 20:14

I don't think you have much of a case

Assuming your company is a private limited company then to get a £750 fine the accounts must have been between 3 and 6 months late ... or up to 1 month late if it is a plc.

Since the company's directors failed in their obligation to file accounts in an acceptable format within the required time frame, I see no grounds on which you can successfully appeal.

Whilst it is unfortunate that the Companies House letter is dated the day after the date of the new deadline, I am not aware that they are legally obliged to give you any extension.

If you get a lawyer involved, win or lose, it will surely cost more than the £750 you are seeking to save.

You can try and make an appeal yourself to Companies House, perhaps along the lines that you had insufficient time to reasonably reply to their extended deadline, although given that they were under no legal obligation that I am aware of to give this, it is really up to them whether they waive all or part of the penalty.

Thanks (0)
Replying to Mike Truman:
avatar
By chatman
09th Sep 2011 15:56

Don't understand first response.

0103953 wrote:
Since the company's directors failed in their obligation to file accounts in an acceptable format within the required time frame, I see no grounds on which you can successfully appealwere under no legal obligation that I am aware of to give this, it is really up to them whether they waive all or part of the penalty.

I thought the point was that they did not fail in their obligation to file accounts in an acceptable format.

Thanks (0)
avatar
By girlofwight
04th Sep 2011 22:12

Escalate
On the facts given, it seems unfair. Askmfor the matter to be escalated, and if that brings no joy try the ajudication service. You've got little to loose.

Thanks (0)
avatar
By taxhound
05th Sep 2011 07:27

I would have agreed with first posting in the past, unfair though it is.  In view of the recent HMRC cases re reasonable excuse etc however, I wonder if you may stand more of a chance now?  (do a search of this site if you have not seen this).

Thanks (0)
avatar
By carnmores
05th Sep 2011 07:41

ask for a copy of the scan

and then compare it to one you do and send them both to the adjudicator - this is clearly an abuse of process if the accounts can be read by the naked eye - can they?

 

Thanks (1)
avatar
By DMGbus
05th Sep 2011 13:21

Hidden standards

Whilst Companies House & Business Link  webpages guidance vaguely talk about documents required to be of scanable quality, the detailed guidance (if it still exists as a public document) is very well hidden.   This, in fairness, should be a good defence, but reports I have seen in recent years is that CH staff are programmed or trained to resist any concept of fairness / fairplay when it comes to late filing penalties "The rules are the rules" attitude (don't help if the rules are hidden).

I HAVE seen the detail CH document standards in print some years ago but can't find a copy just now: font size, contrast ratio, etc were then referred to.

It can NOT be ruled out that CH scanner was faulty at the time of scanning and / or operator fault.

As many of us realise the answer for the future has to be online filing.

 

 

Thanks (0)
avatar
By Richard.Gillin
06th Sep 2011 23:45

Companies House Appeals Manual

The appeals manual http://www.companieshouse.gov.uk/about/pdf/LFPAppealsManual.pdf may be useful - pages 54 onwards deal with rejected accounts.

 

Guidance here: http://www.companieshouse.gov.uk/about/gbhtml/gp5.shtml#ch2 may be useful too - the bit on quality of documents.

 

Thanks (1)
avatar
By Eric T
09th Sep 2011 11:44

The problem is that the director thought that the accounts were in acceptable format when they were submitted.

Who judges when a submission is not acceptable?

What criteria do they use when making such a judgement?

Is an outsider supposed to know and understand the limitations of the technology used by Companies House? 

This whole area needs to be looked at and proper guidelines and codes of practice set out so that people making submissions know exactly the print quality standards required.

 

Thanks (0)
avatar
By DMGbus
09th Sep 2011 14:13

Companies House guidance

Back in April 1996 there WAS detailed guidance on document quality (font size for example).  That guidance was booklet CHN18 (yes a whole booklet).

Unfortunately I can NOT now find my copy of CHN18 now.

I have searched CH current website and can only find very vague guidance.

The lack of publicly available PROPER DETAILED SPECIFICATIONS anymore must be in all reasonableness be accepted as a reason why the fine should be set aside.

The approach to be made in the appeal should along the lines of "what else could the directors have done to make the accounts compliant in the absence of set specifications by HMRC".

What we are lacking here, in being able to form a bettern, is just what quality were the accounts that were sent to CH.  Grey print on grey paper?   Black print on white paper?

Ink jet printed accounts with banding due to inkjet running out of ink?

Font size 8 (tto small!)?

Scroll or itallics font / text?

Glossy paper?

Coloured print?

 

 

Thanks (0)
avatar
By adder1
09th Sep 2011 16:42

CHN18 Document Quality

Try this website www.rmonline.com/notesfrm.htm

CHN1 to CHN31 Notes for Guidance all available. Click on CHN18 and the required information is there.

It took 5 minutes to Google it, much faster than searching heaps of old reference booklets tucked away in forgotten corners.

The following quote from the 3rd paragraph of CHN18 should be of interest to the original poster. I can't see that he was given 14 days to respond!

"The law allows the Registrar of Companies to reject documents which cannot be filmed satisfactorily, and to issue a notice requiring the company to provide filmable quality documents within 14 days. (section 706 of the Companies Act 1985)."

A defence, or am I missing something? Good luck.

Thanks (0)
Replying to petersaxton:
avatar
By chatman
09th Sep 2011 19:39

Really?

adder1 wrote:

"The law allows the Registrar of Companies to reject documents which cannot be filmed satisfactorily, and to issue a notice requiring the company to provide filmable quality documents within 14 days. (section 706 of the Companies Act 1985)."

Cannot be filmed satisfactorily by CH or by anyone?  In any case, I looked at the relevant section http://www.legislation.gov.uk/ukpga/1985/6/section/706/2007-04-01?view=plain and couldn't see that it really says that.

Thanks (0)
Locutus of Borg
By Locutus
09th Sep 2011 16:56

Late filing of accounts

@ chatman - Although I didn't make it very clear in my first response, I kind of feel if a company or their accountants leave filing the accounts to the last minute then they are asking for trouble. Yes, I've done it plenty of times and got away with it, but when I do I always worry whether the accounts will be rejected and now prefer to file online.  I have always found Companies House very inflexible about penalties, so although there are some good avenues to explore (as raised by others), I wouldn't hold out a great deal of hope at getting it overturned.

@adder1 - I thought the 14 day extension was withdrawn by the Companies Act 2006.

Thanks (0)
avatar
By ifunky
09th Sep 2011 17:04

Thanks for the responses!

As far I was concerned the accounts were in a suitable format, there was a slight issue with the printer as the cartridge was running low but you could still read it.  I agree that there are probably guidance documents around which I had not read which they could pull me up on, in which case I would have had to take the fine on the chin.

But the main thing that really annoys me is that they gave me no chance to rectify the situation by sending me a letter in March stating that I should resubmit before February to avoid the fine, they will make a lot of money doing this to people in the same position!

 

Looks like the rmonline document is old, I found the same quote on companies house:

http://www.companieshouse.gov.uk/companiesAct/ca_lateFilingPenalties.shtml  (right at the bottom) and here http://www.companieshouse.gov.uk/about/miscellaneous/removalConcession.shtml

Look like I'll have to pay the fine :-(.  But why did they even bother telling me I could avoid the fine in the first place!?

 

Dan

 

Thanks (0)
By [email protected]
09th Sep 2011 21:20

How to avoid CH fine

It could be avoided if you were to dissolve the company for a cost of £10 payable to CH. The next step would be to form a new company and transfer the assets and liabilities of the old company to the new company.

Thanks (0)
avatar
By girlofwight
10th Sep 2011 12:32

Prima facie on the dates given - a letter 1/3 saying refile by 28/2 there has been an abuse of process by Companies House.

Otherwise known as a [***] up.

I know CH are inflexible on penalties but I'm still of a view that common sense should prevail.  It needs to be escalated back to CH management or adjudicator.

It will need persistence, but it should come good.

In Taxation recently there have been a spate of First Tier Tribunal reports where HMRC penalties are being overturned on the grounds that common sense needs to be applied, "Did the taxpayer (substitute accounts filer) try and comply?"

 

 

Thanks (0)